Iran to ink gas deals with Syria, Iraq

Tehran, July 24, 2011

Iran said on Sunday it reached a trilateral agreement with Syria and Iraq to build a pipeline which would boost its gas exports, a senior official was quoted as saying by the media.

"This contract will be signed Monday in the port city of Assalouyeh," Javad Oji, head of the National Iranian Gas Co (NIGC) was quoted as saying by the semi-official Mehr news agency.

"Iran's gas will be transferred to Syria through Iraq, and Syria will then buy 20 to 25 million cubic meter of gas from Iran per day," the official IRNA news agency quoted Oji as saying.

According to Oji, Iran is currently producing 600 million cubic meters of gas per day of which 37 million cubic meters is exported. He estimated that by the completion of the 24 projected phases of the South Pars gas field, production would reach 1.2 billion cubic meters of which 250 million cubic meters will be exported.

Oji said the pipeline, with an estimated construction cost of $10 billion, would be inaugurated within the next three to five years.

Iran has long-term ambitions to expand its gas exports, particularly to European countries. However, while Iran holds the world's second-largest gas reserves, it currently has no major net exports, partly due to international sanctions.

In January, Iranian and Syrian oil ministers said their countries planned to build a gas pipeline with the cooperation of Iraq to widen export options for regional energy players.

The South Pars gas field in the Gulf, shared with Qatar, makes up the world's largest pure gas reserve. Oji said the field holds 16 trillion cubic meters of recoverable gas which can be a secure source of gas supply in the next 80 years.

Western firms with capital and technology have pulled out of Iran's lucrative energy sector due to a long-running international dispute over Tehran's nuclear programme, which the United States and its allies suspect is aimed at making bombs - a charge that Tehran denies. - Reuters